Homer Alaska - News

Story last updated at
4:31 PM on
Wednesday, October 3, 2012

Buccaneer Energy seeking permits for project 20 miles east of Homer

By McKibben Jackinsky
Staff Writer

Work on the jack-up rig Endeavour-Spirit of Independence, with its three 410-foot legs towering above the harbor, isn't Buccaneer Energy's only work on the southern Kenai Peninsula. The oil and gas company also has drilling planned for West Eagle, an area approximately 20 miles east of Homer.

On Monday, Mark Landt of Buccaneer will give a 10-minute visitor presentation about the company's plans at a regular meeting of the Homer City Council. The council meeting is held in city hall beginning at 6 p.m.

"Buccaneer has nine leases from the state for West Eagle, but no permits at this point," said Jay Morakis of JMR Worldwide, the public relations firm representing Buccaneer.

Although not the first one to hold these leases, which comprise around 50,700 acres, the state assigned them to Buccaneer in 2010, according to Kyle Smith with the Alaska Division of Oil and Gas. Buccaneer has 100 percent working interest and 79.25 percent net revenue interest in the leases. The remaining 20.75 percent revenue interest is held by the state of Alaska and various private owners, according to Morakis.

Buccaneer's plan to drill in the West Eagle area is based on a reprocessing and interpretation of 230 miles of two-dimensional seismic data shot more than 30 years ago by AMOCO.

"We have taken the raw seismic data acquired in the past by another company and applied modern computer software and techniques to clarify and refine the data to give us a better representation of the substrata," said Morakis.

The first well is to be exploratory and primarily a gas test with a possibility for oil. It is to have an initial depth of 10,000 vertical feet.

Drilling of the well will be done by the Glacier Drilling Rig.

"(The rig) is ideally suited to operations such as West Eagle and is currently in use by Buccaneer at our Kenai Loop project," said Morakis.

With the Kenai project still in operation, Buccaneer was unable to meet a Sept. 30 deadline to begin drilling at West Eagle. However, Buccaneer has submitted a unit application, which, if approved "allows them to hold onto lands for another five years based on a finding that's either a reservoir or a potential hydrocarbon reservoir," said Smith.

Drilling cannot begin until that application is approved. Public comment is currently being taken on the unit application.

"What we're noticing (seeking comments on) right now is the unit application, providing that extra time to develop the actual site," said Smith. "The plan of operations depends on whether the unit is granted. If not, the leases will expire and then they (Buccaneer) have an opportunity to appeal it."

A decision on the unit application could come as early as November, said Smith.

While the state owns sub-surface rights, the Kenai Peninsula Borough owns surface rights to one acre of the leased area. Buccaneer has applied for, but not yet been issued, a KPB temporary land use permit, said Marcus Mueller, the borough's land use manager. The location of Buccaneer's proposed work falls within a borough grazing lease issued to Jim VanOss and Camille Rohrer and a materials site operated by East Road Services. The grazing lease expires in 2028; three years remain on the agreement with East Road Services.

"The permit we're talking about is a surface entry kind of permit, basically the surface landowner's permission," said Mueller. "That's the only permit they'd need from the borough. ... It's a normal (drill) pad site which would be less than an acre."

It is not unusual for the borough to have permitted surface activity on land for which the state has sub-surface rights, according to Mueller.

"We have communicated with Buccaneer in terms of their time frame. They don't seem to be in a big rush," said Mueller. "We also are working with VanOss, Ms. Roher and East Road Services to make sure we're all on the same page."

A total of two federal permits, six state of Alaska permits, two private agreements and the borough permit are needed for the West Eagle work, said Morakis.

Drilling of the first well is anticipated to take 30-60 days, with 15-20 people at the site on a daily basis.

"The drilling pad will include the drilling rig, office building, warm and cold storage areas and maintenance buildings," said Morakis. "The onsite office will contain housing for several personnel including the drilling supervisor and the tool-pusher. All other drilling personnel will be housed offsite in existing facilities available locally."

In addition to the presentation at Monday's meeting of the Homer City Council, Morakis said, "We plan to have other outreach meetings prior to drilling."

For more about Buccaneer Energy, visit www.buccenergy.com. Alaska Department of Natural Resources public notices can be followed on the Web at dnr.alaska.gov/commis/pic/pubnotfrm.htm.

McKibben Jackinsky can be reached at mckibben.jackinsky@homernews.com.